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2016-08-23 Council Workshop Packet-Budget CITY OF MENDOTA HEIGHTS CITY COUNCIL WORKSHOP AGENDA August 23, 2016 – 5:00 pm Mendota Heights City Hall 1. Call to Order 2. Roll Call 3. 2017 Budget Discussion a. Overview b. General Fund Levied Department requests • Fire Relief • Fire • Police • Public Works/Engineering • Planning • Mayor and Council • Administration • City Clerk • Finance • IT • Administrator c. Non Levy Budgets • Facilities • Par 3 • Utilities d. Policy Issues • Seal Coat Funding • Water Tower Fund e. Other Budget Discussion 4. Other business a. Out of Town Conference—City Administrator 5. Adjourn DATE: August 23, 2916 TO: Mayor and City Council FROM: Mark McNeill, City Administrator SUBJECT: Preliminary FY 2017 Budget COMMENT: INTRODUCTION: At a workshop meeting on August 23rd, the City Council will discuss staff recommendations for the proposed General Fund Operating and Capital Budgets for FY 2017. This is the first of three scheduled workshops; the second one specifically for the budget is September 8th. However, tied closely to the budget is a look at Engineering, and a recommended reorganization, which will be discussed on August 25th. The preliminary budget must be certified by September 30th. This means that the preliminary budget must be adopted at the September 20th Council meeting. This preliminary budget should be considered the maximum levy; the Council has the ability to reduce it after the September adoption. It may not, however, increase it. As in previous years, the Council will hold a hearing in December to provide for public input. I recommend this be part of the regular City Council meeting on December 6th. The final budget must be adopted by the end of December. BACKGROUND: As were the instructions last year, staff was instructed to prepare its FY17 budget requests to provide for the same level of service as is being provided in 2016. This is termed the Base Budget. With only a few exceptions, it is the same budget as was approved for 2016. However, some operating line items were increased if it looked like they have been consistently under- budgeted (overspent) in previous years. Any projects or expenditures which would be services above what has been provided previously were instructed to be listed on an Improvement Package request. Many of these qualify as capital expenditures, but others don’t meet the traditional definition of Capital Expenditures. However, they still might be considered to be major considerations. Base Budget: Without including the Budget Improvement Packages for 2017, the proposed Base-level budget is increased by $411,586, over 2016. This is due to the following: • Wages. 2017 will be the second year of labor contracts, which will call for a 2.5% Cost of Living increase. This is factored in. • Worker Comp Insurance. The City’s 2017 premiums will see a 10% increase. • Health Insurance Premium Increase. After two years of no increases, followed by last year’s decrease in the amount of health insurance, the City has been notified of a 6% increase for next year. It means an increase of $74,166 for the General Fund. • Personnel Positions. The Council approved the addition of a Police captain, and a .5 Community Service Officer/Student Intern mid-2016, and 2017 will be the first full year of these positions. On the reduction side, the Accounting Clerk position is now .6 FTE, versus the previous full-time status. • Engineering Transition. The change from project-based funding, to one that is levy based, is reflected in this budget. This will be discussed in detail at the August 25th workshop meeting. YEAR TO YEAR DEPARTMENTAL COMPARISON: The following increases are proposed for each department. Note that they do NOT include most capital expenditures. The comparisons of Base Level budgets 2016 to 2017 are: Department % Increase (Decrease) Notes City Council 4.11 Administration (2.9) Elections (33.6) No elections in 2017 Information Technology (3.0) Police Department 7.8 Additions of Captain, and .5 CSO positions Fire Department 2.2 Building Official 4.0 Increase in inspection activity Streets 2.0 Parks .8 Recreation 5.2 Planning 34.1 Consultant needed for Comp Plan Update Recycling 3.7 Animal Control No change IMPROVEMENT PACKAGES/CAPITAL EXPENDITURES: Staff submitted a total of 23 total improvement packages. Many of these would othersise be classified as Capital Expenditures. Individual sheets with more detailed explanations are included in the departmental attachments. TAX IMPACT: Each 1% increase in the levy generates approximately $74,000. The Base Level budget increase of 5.55%, but the overall levy increase is slightly less at 5.48%. The overall levy includes such things as: • Debt Service • Emergency Preparedness • Fire Relief • Infrastructure • Equipment reserve With the proposed overall levy, and adding the Improvements Packages as presented, it would mean a total levy increase of 7.82% for FY17. Translated to dollars, that is a levy increase of $579,431. As shown on the attached sheets, the property tax rate with these changes, would go from 35.247 in FY16, to 37.586. A page also shows the impact of the levy increase on four homes of varying values in Mendota Heights. NON-GENERAL FUND BUDGETS Staff will present the portions of the budget which are enterprise funds, or do not otherwise impact the general levy—the utility funds, Facilities, and Par 3. The rest of the levy must be certified by September 30th; these other funds don’t need to be finalized before the end of the year. Engineering will be discussed at the August 25th workshop. SUMMARY At the August 23rd workshop, the Council should discuss and give direction on the preliminary FY17 Budget. _________________________ Mark McNeill City Administrator 2017 Budget Capital/Large items Administration Recommended Job Evaluation System 15000 15000 Fireworks (Increase)6000 3000 Cleanup Day Contracting 3000 3000 Village Landscaping 10000 10000 Volunteer Coordinator 12000 0 IT LOGIS Hosting 21200 0 Server Hosting 19,000 0 Fire and Police Hand Held Radios 6000 (net)6000 Relief Association Pension Increase 18000 18000 Police Investigators Car 35000 12000 (lease) Squad Cars (two)89000 30000 (lease) Body Cameras 45000 10000 (35K in 18) Public Works Skid Steer Loader 44000 44000 Backhoe tractor with bucket 92000 0 Parks Mower 22800 22800 TOTAL 438000 173800 DATE: August 23, 2016 TO: Mayor and City Council FROM: Mark McNeill, City Administrator SUBJECT: Out of State Conference Request COMMENT: INTRODUCTION The Council is asked to give tentative approval for the City Administrator to attend the 102nd Annual Conference of the International City/County Management Association. This will be held September 25-28th in Kansas City, Missouri. BACKGROUND By policy, the City Council must approve all out of state travel at an open meeting. I am asking the Council to give tentative approval at the August 23rd workshop, so that registration may be made before an increase in registration fees takes place on August 25th. Official approval would be sought at the September 6th meeting. The ICMA Conference is recognized as the premier annual conference for the city management profession. I would be attending 3 of the four days of the conference, and would need two nights’ hotel lodging. I would drive on September 24th, and return the evening of September 27th. BUDGET IMPACT The 2016 budget included funding for me to attend the ICMA National Conference. However, I opted instead to have Tammy Schutta attend the State City Managers Conference in May. With her leaving in July, funding has become available. Estimated costs are: Travel (airfare equivalent) $226.40 Registration 720.00 Lodging 475.00 Meals 150.00 Total $1571.40 RECOMMENDATION Give tentative approval to the City Administrator’s request to attend the conference. If the consensus is positive, an official request will be made at the September 6th City Council meeting. ACTION REQUIRED Discuss, and indicate approval or disapproval.